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The American's Creed

I believe in the United States of America as a government of the people, by the people, for the people; whose just powers are derived from the consent of the governed; a democracy in a republic; a sovereign nation of many sovereign states; a perfect union, one and inseparable; established upon those principles of freedom, equality, justice, and humanity for which American patriots sacrificed their lives and fortunes.

I therefore believe it is my duty to my country to love it; to support its constitution; to obey its laws; to respect its flag; and to defend it against all enemies.

Have you ever wondered what your net worth should be based on your age? Although this doesn’t exactly show you what your net worth should be, it will give you an idea of what the average net worth is based on age range.

Take a look at this Family Net Worth Chart from page A8 of the Federal Reserve’s 2004 Survey (PDF):

To make it a little easier to read, I took the figures and multiplied them by 1,000 and put together the following table:

Age Range

MedianNet Worth

AverageNet Worth

Less than 35

$14,200

$73,500

35 – 44

$69,400

$299,200

45 – 54

$144,700

$542,700

55 – 64

$248,700

$843,800

65 – 74

$190,100

$690,900

75 or more

$163,100

$528,100

Median means that half of the households surveyed had a net worth above, and half had a net worth below the median. So, for the less than 35 group, half of those who took the survey had a household net worth of LESS THAN $14,200 and half had a net worth GREATER THAN $14,200. Notice the huge difference between the median and the average. The survey used real net worth, which is the difference between a families’ gross assets and their liabilities.

My wife and I are way above the median net worth for our age group (35 – 44) but below the average net worth for our group. That’s okay with me because we are on the young side of our age group. I fully expect us to be above average by the time we are in the upper end of our age group.

Where do you stand?

If you need help figuring out your net worth, I did a series of posts on net worth that might be helpful:

Wow, this is pretty interesting stuff. We are way ahead on both median net worth and average net worth for our age group of less than 35. In all fairness, in respect to our crazy net worth, half of it is the equity in our house since we live in NJ. We bought a new house in late 98 and since then the market has gone crazy with a 100% return on our investment. (though that is finally beginning to settle down here.) We were lucky that we could save almost every penny we earned when we were living @ home the year before we were married. That has made all the difference for us!!

Hm, I’m pretty close to the average. (We do our finances separately.) This makes me feel a whole lot better. One place in particular that I read I feel like I’m way behind because it seems like lots of people who are significantly younger than me are way ahead of me on the net worth.

This is encouraging. In the end, the important question is whether your assets are sufficient for your needs, and hopefully your wants.

One way to think about home equity is to consider it a reflection of the portion of your housing costs that’s already paid for. That is, your home equity is the portion of the current value of your home that you don’t have to make mortgage payments on. If you are living in an area with high housing costs, your home equity asset has to balance a larger cost stream of housing expenses.

Here’s an interesting question that I think is worth considering: What categories don’t you include among your assets? Some people argue that home equity shouldn’t be included. I won’t argue that point other than to say that it’s clear that several readers here understand some of the reasons for that.

When I calculate my net worth, I don’t include most of my personal possessions. I don’t consider my clothing, furniture, home electronics, or exercise equipment. If I ever decide to sell it, the proceeds will probably just partially offset the cost of replacements.

[…] All Things Financial Blog Fortunately, even though NetworthIQ doesn’t let you see averages, I read this post from All Things Financial Blog containing statistics on average net worth based on age. From my guesstimate on NetworthIQ, it looks like the actual average net worth figures are quite a bit lower over all than what was posted on NetworthIQ. I’m sure people are more inclined to register with NetworthIQ and post their net worth if they’re proud of it. I woudl imagine it skews high because of this. […]

My wife and I are about 5 years from the upper end our our age bracket and exceed both the median and average net worth, the average by almost 4 x’s. That’s our financial net worth, not including our crap…furniture, jewelry, cars, etc. We didn’t inherit anything. We don’t make exhorbitant amounts of income. We have a financial advisor. We systematically save and invest into managed mutual funds across multiple categories. Only about 30% of our net worth comes from our home equity, we don’t live in a residential housing bubble part of the country.
Here’s the secret(s): live below your means; don’t buy new cars all the time; have a ginormous emergency fund; have some insurance in case you get sick, can’t work, or … DIE; don’t ever put anything on a credit card or any kind of financing or delayed payments through any retailer; put 15% of your income into a 401k or IRA and fuhgit aboutit; it’ll happen automatically…

I’m 28 and my networth is 3x the average. I max out my 401k, Roth IRA and Employee Share Purchase in my company which is 10% annual salary. I’m think I’m saving alot. And it’s because you never know what will happen in the future. I’d like to invest more in mutual funds because I think my cash is too high. I shop and eat out quite a bit, but nothing extravagent. I travel and enjoy life. Having no kids is great. I plan to retire early and travel around the world.

This table doesn’t really say much and I wouldn’t right off the bat get all too worried if you are below a certain number or get too exited if you’re above another number. Geography for example is an obvious factor that isn’t considered. It seems to count certain defined “readily liquidable assets” perhaps and some people just have more of that category than others for various reasons. As for the large discrepancy vs. average, that’s likely due to the fact that the small percentage of the “rich” hold a substantial portion of the wealth, thus skewing the average way up. Furthermore, retirement, lifestyle, etc. are highly personal and it’s more important to plan your finances according to your individual needs rather than taking these hard numbers as a “standard”.

We’re twice the average with 7 years left in the age bracket, 47 yrs old. Here are my investment strategies which we’re passed onto me by my grandfather. I pay myself each pay day (20%) which means I live within my means. I don’t pay any finance charges with the exception of my mortgage. It’s impossible to accumulate wealth paying interest. I’ve had a diverse porfolio. 40% in hard real estate and 60% in solid proven stocks. For example, during the real estate boom, I did not purchase more hard property, I bought stock in Toll Brothers. This paid off handsomly. I take advantage of all pre tax investments possible. Never borrow against your investments. Be smart and use common sense, it pays off tremendously.

Jon shouldn’t be so surprised that Mia has accumulated a net worth of $200,000 before age 30. Both our kids have done the same thing. Yes, they were lucky in the sense that we were able to put them through private colleges. But they were also smart in taking the trouble to understand what we did with our lives to be sure that would happen–and to emulate it. We’re well over triple the average net worth shown here with three years to go in the age bracket.

So, if you manage to get out of college with zero debt, and if you’ve saved and invested your summer job money since you were 14, and if you get a good job and instantly begin paying yourself first (IRA, 401k, etc.), 200 large before 30 is very possible. And because Mia is so young, she’ll become very, very wealthy.

As to what should be counted in net worth, it’s generally conceded that home equity is still included. But the industry has invented a new calculus known as “HNWI,” or “High Net Worth Individual,” which excludes the home. To qualify as a HNWI, you need at least a million in investable assets outside the home. If you’re “just” a millionaire including home equity, they call you “mass affluent,” or “emerging affluent,” or “sub-HNWI.” Such are the wages of inflation. Millionaires just ain’t what they used to be.

i’m 35, girlfriend is 32, we’ve got a home paid for worth about 400K and 350K in mutual funds… feels like we’re really kicking ass, but still feel like we’ve got a long way to go if we’re going to look at retirement in 20 yrs…

I’m 33. Live in Dallas. Graduated college with nothing, but also didn’t have any debt (the fortunate part). Since then, my net worth has risen to 680,000. 80000 of that is down payment on home, so 600,000 is investable assets. Most was savings, and market returns on that. I did make 100000 profit on a home I remodeled (did all work myself). I make good money (about 135000), but my wife doesn’t work and we have 2 kids. Saving is tough early because you don’t see the rewards, but later when your money builds, you see how much the market can return, and you want to save more! Just start as early as you can!

I’m 27, and I think my Net Worth Income is around $420K. I live in the Bay Area, and this number includes equity in my personal residence. I also own rental property, and regularly invest in small cap stocks. If you take out my home residence, my Net Worth would be closer to $250K or something. I think the numbers above do not include primary residences.

I’m 30.5 years old, and have a net of $330k. I graduated public college with nothing, and paid my own way through law school with cash and scholarship. I worked as an engineer for 1.5 years, and a lawyer for about the same time making $125k. However, after I was fired by the big law firm, I started selling items on ebay, which will net about $200k this year. So the bulk of my net worth comes from ebay, which is like having 2 full time jobs. I live like a relative pauper, or indentured servant. I only pay $550/mo in rent, and have a roommate. I never drink, rarely travel for fun, rarely go out, rarely buy clothes, drive a 10 year old vehicle. My only indulgence is golf. I feel like I’ve been busting my balls all the time to save some money, yet without ebay I would only be slightly over the average for my age. I am very far from even having a chance of living the luxury leisure lots of travel lifestyle that I’ve dreamed of since youth. It seems that in this current world of rich and poor, you have to do something absolutely drastic like manage a hedge fund, start youtube or facebook, to have financial freedom. Financial freedom just isn’t in the cards for normal people anymore. Even those with law degrees. Those people spend their entire lives in the law office to accumulate just couple million, or about 2x average. To those other people on here in their early 30s and have several hundred thousand, I don’t know how they do it, cuz I feel like I’ve done all I can.

Lemme get this straight, Greg S. You say you’re netting $200k this year, you live frugally, you’re 30, and you can’t forsee “making it?” You’re either joking or you have no grip on reality. Go see a real financial planner (not some banker or mutual fund salesman or insurance hawker), and have him or her run a few projections for you. Do you have the most basic clue about how many people in this country would love to have your “problems?” Of course, your post is a bit suspect overall given the nature of your resume. And, by the way, it doesn’t take an economist to know that “a couple million” is not “2x average.” If that were true, everyone would be millionaires, and that is decidedly not the case.

While its true that I’ll make $200k this year, this is going to be an unusually good year. I have no idea how I am going to make anywhere near that in the coming years. This year I’ve basically sold my soul for the year to make that $200k, No social life, no leisure, no steady girl, no nothing except work. Since, I’m a low net worth individual that seems a good trade for me for now. But to spend an entire life like this would be a tragedy. My “2x average” statement above was meant to apply to people in the 55-64 group, which was $844k based on the 2004 Fed numbers above. Remember that is an average of all people in that age group. If you include only say college educated people those numbers go up significantly. My point was that it doesn’t make sense to spend well over 50% of your adult waking life in a miserable office environment, just to walk a way with maybe 1 to 4 million when you are in your 60’s and nearing death. I’m talking about the people who work significantly more than 40 hrs per week. The problem in our society now, is that since everything costs so much, you can have $500k in the bank and still be on the brink of bankruptcy. Back in ’02 I was in the hospital for 4 days. The bill was $60,000.00. Yep, sixty-thousand bucks spent in four days. And that was a minor medical issue, imagine if it were something major. Al, do you realize that I have great academic credentials and I’ve been busting my balls for almost a decade working crazy hard. Yet, I can still not even comfortably afford a freggin house to live in? To me “makin it” big is when you don’t have to work for money, and you are not about to die. It seems that is a very hard combination to pull off for all but a very fortunate few.

Greg S., I understand where you are coming from. The only mistake I can see is that although you are only paying $550 in rent, you are not making any additional return on the easiest net worth-your personal home. Those figures for the older age bracket included a home that was owned outright, I am sure. Your doing great with the car, which is my flaw. Just bought a 740LI BMW. I am sure it has set back my retirement by about 5 years! But I do love that car. Now that the bubble has burst, go by a home!

I’m 42 and have a net worth, not counting my business, of 5.2M. I inherited 200K when I got out of college, invested that, and worked for 3 years before starting my own busienss. The key to building high net worth is living way beneath your means and investing the difference wisely. I make 350K-500K from my business each year (before income tax), but only have annual living expenses of about 50K. My situation is pretty extreme obviously, but it can also be done without owning a business if you just keep your expenses low.

Bubba, keeping expenses low is not going to cut it for most people. For example for a typical family whose income comes from employment, the difference between their total income and their expenses, will likely amount to $1 million only after SEVERAL decades of prudence. Building a successful business is seemingly the only way to become wealthy before old age. Please share how you able to do it? What industry? What knowledge or special contacts did you have before starting your business? Etc. I’d love to know.

Al, you said that my earlier post was “suspect given the nature of my resume.” What do you mean by that? Are you saying that someone claiming to have both law and engineering degrees is suspect? While obviously a small percentage of people have that combination. It is a sad day for higher education when claiming that you have two degrees, makes a post “suspect.”

Whew. I have been wondering how I stand. A year into the 45-54 age range I am sitting at about 220% of the average. It makes me feel a whole lot better about a decision to retire from the military in a year. I thought I was doing a pretty good job in saving etc but had nothing to compare myself to. Not that this is a real indicator though. Just becasue I have managed to hang onto more than most does not mean it is enough to have the retirement lifestyle I hope for in retiring at age 47.

This is very interesting. I’m 29 and work as an Attorney at a law firm in Washington, DC. I have a house completely paid for (worth about $650,000), $480,000 in Stocks, Mutual Funds and Bonds, and around $60,000 in retirement accounts. Granted, the house was purchased for $200,000 in 2000, with money that was meant to pay for law school (I was given a scholarship). My current salary is $180,000 plus $30,000 if I meet my billable hours each year. Since I have no mortgage, I’m able to save around $140,000 per year. I think the key to saving large sums of money is to cut out the monthly expinditures that drain away investable cash flow. Also, keep in mind that anything you buy is after-tex income – so that $90 per month gym membership that you never use is really costing you $180. It’s simplistic – but true.

One of the keys to wealth building (and the only thing you’re lacking at the moment in my opinion) is patience.

You say your net worth is around $300k. You’re on the right track. It takes about 7 years for assets to double if invested wisely. In 14 years your net worth should be around 1.2M. By that point at a conservative 6% interest, you’ll make a measly 70k yearly without even having to get out of bed. Not bad for someone at 44.

Add on another 14 years at 58 years your net worth will be around 5M! In the above chart for someone of that age the median is 248k and the mean is 843k.

Remember that these numbers are assuming that from this point on you add nothing to your net worth which is a very unlikely scenario.

What I’m saying is that you’re way above the curve for someone your age. Invest wisely, and keep at it and you’ll be wealthy beyond your dreams.

When I was 30, I had a net worth of about $20,000, still paying student loans and had a small credit card debt. I had a modest job making $45,000 a year. I’m NOT an engineer, attorney, or computer specialist. I have not had any help from family for college or anything else. I did not save a lot only in my 401 (k). But I had a lot of fun in my 20’s traveled much of U.S., Europe, cruise the Carribean, etc.

I recently liquidated all of my assets and bought a motel with my finance’, In one year, my net worth is about $100,000. Real estate helps.

I plan on buying one more motel and then have my investments pay for my house and lifestyle. In ten years, I will be a millionaire and in a another 15 years a multi-millionaire. My advice, money is not everything, take time to enjoy life while you are young, I did. And invest smart. There is time to have fun and time to buckle down, work, and accumulate wealth.

I feel like I’m in a similar situation as Greg S. without the bleek outlook. I’m 26 and have a net worth of around $300k including my home, $200k without. I’ve worked my butt off in the oil and gas industry and made $190k gross last year. I think that I’ll hang around that kind of income for awhile and feel very optimistic about my future.

I’ve been putting my wife through school for the past 4 years and have no kids, but will probably happen soon. The way I look at it, I can probably retire when I’m between the age of 40-45.

The smartest thing that I ever did was start maxing out my 401k when I started my job and taking full advantage of the company match and compound interest. I also follow the rule of never buying anything I can’t pay cash for, besides my home.

When I was 20, High School diploma, married and had an annual income of 26K, and a net worth of 10k
When I was 30, 2-year Associates degree, 2 children and an annual income of 40K and a net worth of 85k
When I was 40, Annual income of 140K and a net worth excluding home of 500K
Now at 42, Annual income 1.5M, and a net worth of 2.4M,(excluding homes)

IMHO, A few keys to success,
1. spend less than you earn
2. save more than you probably want too (401K….umm free money!!, high interest online savings accounts, automobiles way too expensive, drive em till they die!)
3. flexibility, be prepared to chase the money by moving, , asking for a raise, changing careers, buying a fixer upper house, etc.
4. look for opportunities, in jobs, investments etc.
5. Stock Options (No, I never go any but they are great if you work somewhere you can get them)
6. Own your own business (care to guess when I finally got round to doing this one?)

My husband and I are in our 30s and doing pretty well, but my concern is this, does the average person invest enough to comfortably retire at 65? If not, then the numbers are somewhat misleading.

To make the math ridiculously simple, if the average person saves $100 and $500 is needed to retire comfortably then I’m still in trouble if I only have $350. Great compared to the average but still not enough to retire at 65 if that were the goal.

We have spoken to a number of investment counselors but seem to get answers which are all variations of the same theme. “Save everything you can” Sound advice, but should we forego a vacation in order to save? Should we reduce our eating out to once a month or eliminate it all together? We are already putting money away every month, 6% of my husbands check before tax, plus college fund for the two kids, accelerated payments on the mortgage, no debt elsewhere except for a leased vehicle. How do I know if this is enough? Any advice would be greatly appreciated

IMHO, you can only save as much as you possible can and still try to enjoy life now, will it be enough? no one knows, but look at it this way if right now you have an annual income of say 45k a year, is it enough? probably not, what do you do now you live within the 45k limit and I think it will be the same when we retire we will have to make do with what we have.

It sounds to me like you are good savers already and just the fact that you are asking these questions while already saving, 6%, saving for college,accelerating the mortgage, leads me to believe you will have an good retirement.

Like it or not we cant save more than we make and yes, you have to eat!

These comments are excellent and far more illuminating than charts and raw #s could ever be! My story: I’m a 29 (soon to be 30) year old web marketing manager (4 yr public college degree)in new england. As of 3 years ago, in 2005, my net worth was approximately -$17,000. That’s right, negative 17k. I owed $5k on a car loan, $5k on my student loans, and over $10k in credit card debt. I had a grand or two in the bank and a little in my 401k. My resolution for 2005 was to start fixing things. I got a better job, going from making 40k to 50k, sold my motorcycle for $4500, which I used to pay off 2 of the 3 cards, made double payments on my car loans, started keeping a journal of all expenditures, cut down on eating out etc.
Fast forward to today, 3 yrs later. While I make a bit more money (still underpaid at $65k), I have little cc debt, max out both IRAs, and no other installment or revolving debt outside of ~$2500 in student loans. My current net worth is about $85,000. I’m also in line to receive a substantial settlement that will be invested in a most careful and conservative manner. I drive a 14 year old BMW that I’ve had for nearly 7 years, and do my own repairs. I do not yet own any property and am going to wait 6 months to a year to buy a multi-family.
I have no delusions of retiring at 45, but I can tell you that hard work and financial ‘tough love’ pays off. My goal is to be worth $500k by 35, which I think is quite attainable. The real keys, I have found, are to max out your retirement contributions, get rid of CC debt/car loans, and constantly be keeping your eyes on the prize – not the glitzy new whatever the Jones’ just brought home. Too much emphasis is placed on the accumulation of ‘stuff’ as a barometer for happiness. That short-term psychological ‘runners high’ a lot of folks get from impulse purchases and having new cars etc etc. You gotta tune that out and figure out other ways to be happy. For me, it’s cycling, skiing, running, kayaking, going to see local live music, reading, and working an old sports car I’m restoring bit by bit. I don’t need or want the trendiest nightspots, a new expensive car, expensive vacations, the most expensive cell phone, a 60 inch TV, or a gold digger high maint. type of girl on my arm to feel fulfilled. YMMV.

Guesty: I appreciate your assertion than my $300k that I have at age 30 will be $5 million at age 58, but your assumptions are flawed. Some rough math shoes that you got to earn 10+% every year in a row to get those results that not likely at all. Sure patience is a virtue, but who really has 30 years to become wealthy? Maybe me 2 year old nephew has that much time, but most people reading this post do not. You say patience is a key to wealth? Well i guess anybody can be rich given a modest bank account and 200 YEARS time. Problem is that humans do not live that long. There’s no guarantee that I or anyone else will even live to see age 58. And the whole point of wealth is to be able to enjoy it while you still have some youth. The idea is not to save it till you are old and just hand it over to the nursing home (they charge $50k year now, and prolly $100k/year in 20 years). If you live like a miser and you work your whole life you will maybe be old and wealthy before you are infirm or dead…but is that really a good goal?

The bottom line from this blog is that there a very few unlikely ways to become self-made wealthy before old age. Be one of those lawyers who can make $200k/yr at age 29 (these same people will be making $800k/yr at age 40) great deal if you got the report card and the work ethic/tolerance for big firms. Start a business – i think this is the holy grail I seek (big law firms have great city views, but can be depressing). Or do something extreme, hedge fund managers, private equity corporate raiders, website founders, and a very select few rediculously paid executives. Standard paths to “wealth” such as most lawyers, doctors, professionals, engineers, accountants, middle managers, will never make it by saving/investing. These people will always be in the middle (between the big shot money men/women – the true rich and the walmart workers – the true poor) which is no real security at all. Loose your job – loose your lifestyle for most professional-workers.

If you are going to post on here about getting rich through your business, making $1M+ per year, please enlighten us with what kind of business, and how you got into it, etc. I want to get there – bad.

Greg S, I think the problem is that your financial aspirations are beyond the expectation of most people. Maybe we need to level set here. What exactly is your definition of financial freedom? If you can’t be financially free with a net worth of let’s say 2M…what exactly do you plan on spending your $ on? I’ve just have never heard any person worth 2M say “damn, how ever will I get by”?

If you have aspirations of sailing around the world, owning a stable of Arabian horses or building a casino than that is a different story. In that case I can understand the frustration because it’s difficult to achieve that level of wealth through traditional means. But based on what you written, I don’t get the sense that’s what you’re after, or is it?

I’d feel great if I had $2 million at age 30. But I don’t. With about $350k I’m still striving for that first million. $2 Million would generate income of only $100 to $120k on an ongoing basis. Which is a very middle class lifestyle in most major cities. But considering you’d be earning that income without working that’d be luxury. I have aspirations of actually owning a home outright (a suitable house would cost about $1.5, in the major city I live in). It’s hard to achieve such things by traditional means. I did manage to make $10k last Thursday by buying 6,000 shares of TTWO, so I was happy about that, but of course such profits are unrealized and come with big risks.

Wow – heres my question – if your married do you need to 1/2 your net worth to compare it to these figures? I am over the average any way you slice it, but I think it makes a huge difference once you have been accumulating assets for awhile.

This is a fascinating blog because it puts a human face on the statistics. Okay, so here is my story — I’m the son of E European immigrants who moved to the US after WW2. they were average working class folks with solid values. They started with nothing and managed to build a very comfortable retirement for themselves by (a) working in companies with steady incomes and good retirement benefits including defined income pensions and (b) owning their homes outright. They paid for me to go to a good public Univ (in Canada which still has excellent colleges for a fraction of the tuition of US universities, and formerly a great excgange rate — before the dollar tanked). I paid for my own tuition at grad school (Harvard). After I graduated I earned $32K/year in 1986 working at a consulting firm and had about $20,000 student debt. One of the big lessons from my parents was “buy property ASAP”. Which I did 1 year after I started working. It was a studio apartment in DC that I bought in forclosure. I eventually turned it into a rental property and moved on. I am now one of those “lucky few” private equity investors doing interesting deals all over the planet. My wife is a partner at a big US law firm and we are well over the median and averages for our age bracket (35-44). We have homes in London, NY, West Virginia, and the Cape Verde Islands — all of which have increased significantly in value. We travel to amazing places all over the world, meet lots of fascinating people, and by most accounts we “have it made”. If I wanted to stop working I could at any moment(which I don’t because what I do is too much fun!). I guess my point in writing this blog is to say that as the child of immigrants with no major financial kick-start, I have been able to make it reasonably big and have had lots of fun along the way. The main points for me were (a) get the best education you possibly can — it can never be taken away and its rate of return goes well beyond the financial; (b) invest in real estate asap — by far my best returns of ANY investment class– mostly because of the power of cheap leverage; (c) find something you LOVE to do and be engaged in it fully — don’t do things you hate just for money — its soul killing; (d) look at the whole world — NOT just the US — there are so many amazing opportunites all over the planet — get a passport and explore; (e) find the right partner in life, it makes all the difference; and finally (f) set goals, without a roadmap its hard to arrive at your destination!

What did you major in at Harvard? Do you think buying property asap is a good idea after an unprecedented run-up in home values? That cheap leverage could also work in the other direction. How did you get into PE? I’d love to get some insight from one of the “lucky few”. Lastly, what is your net worth?

I majored in finance and economics and public policy. My first job was in management consulting followed by a couple years at the International Finance Corporation (the private sector part of the World Bank). A couple of very senior guys from the Bank started a PE Group that ended up raising what was at the time the largest PE fund for emerging markets. I was lucky enough to be there from the start. We ended up raising over $6 billion in funds covering the entire emerging market world. That gave me the credibility to then launch my own fund group. I have recently been the beneficiary of the accendence of the emerging markets. The growth rates in my focus countries (CIS) continue to be very strong.

To get into PE these days usually requires an MBA from a top university, with a major in finance and perhaps a stint in consulting or investment banking. And getting to know some people in the business through targeted networking also helps. I have alums from Harvard who periodically get in touch for advice.

Regarding when to buy RE, the answer is that there are always good opportunities somewhere in the world. Many parts of the US have been in price decline for longer than it may appear. I think there are definite buying opps. Especially if you have euros or pounds to spend!

Hello! Well, I’m just a produce clerk at a grocery store in NJ (29 years) and I spent 4 years in the Navy ($75 a week) before that. Scrimped and saved for years, got into the stock market and got clobbered, then decided to stick to certificates of deposit. I’m 52 and single and own a condo outright (worth about $110,000). I have $535,000 in cd’s and no debt. I do consider myself extremely lucky and I hope to retire in 5 years and move to either North or South Carolina and live off my interest income and early pension.

PE Guy, thanks for the disclosures on how you made it. And thanks for advice in your previous post. One think though. To say your “NW is in the multiple millions” is essentially a non-answer. If you don’t want to say, don’t. If you are worth a huge amount (like $50+) don’t be afraid to say it. Obviously you are wealthy (homes all over the world). If you don’t know your NW to within a million, or two, or a few, thats an enlightening answer too. But to write that you are essentially worth between $2M to billions is meaningless. That range encompasses everyone from those struggling to pay their kids tuition to those who never have to worry about money for anything ever.

Thanks, Greg. I don’t feel I sacrificed anything, I just learned how to be thrifty. I abhor debt and wasting money and I think that even if I had a higher income I would continue my frugal ways! No regrets at all, I feel pretty lucky and I have my good health, too.

That’s great Pete. I abhor consumer debt too. I just makes me laugh when people buy junk like jet skis and such when they have nearly zero, if not negative, net worth. And of course items like that have to be brand new, never used. For example an acquaintance of mine who is 26 just bought an ’07 or ’08 vehicle for $18k financed of course, he has to live at home, no real income or NW at all. He purports himself to be a smart guy, but I don’t know how he thinks thats a smart choice. At the other end of the spectrum I know a high income individual roughly $250k in mid 30s and steady (big firm lawyer) and he just purchased a $400 car that he will actually use to drive. He told people about it too. I would feel a little uncomfortable relying on such a vehicle. But this guy will probably have multi-millions by age 40 without taking any risks or starting any business. I guess he’s a net worth fiend. I’ve been thrifty my whole life, that’s the only way I’ve accumulated $475k at age 31, most of that in the past 2 years. My ’99 Inifniti SUV comprises roughly 2% of my NW and holds up to 5 passengers w cargo. I see no need to spend more than $10k on a used car, anything more is for show or luxury, which is ok if you want and can afford it. But I don’t really feel like I’ve scrimped much either. I’m probably spending $1500/yr on golf and that feels luxurious. It seems like in this day and age of vast mass produced goods, you don’t really have to scrimp to save, you just have to work and not do anything too silly (like drugs, brand new sports cars, ridiculous clothes, etc). But if you want big $ you have to venture out there with some risk or creativity.

Also, I am not exactly thrifty, but I do give alot of thought how I spend my money.
-Spend wisely…there is a happy medium. Spend some, save some and old wise man once told me. Because I don’t think we will be on our death bed wishing we had saved more money. Think about that one…

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Im a 35 year old single woman. My net worth including my home is 375,000. I started my own business working in sales when i was 20yrs old. I worked hard to accumulate customers for a product i bought and sold for heavy equipment. After the first year i started maxing out my retirement(RSPs-Canada) During the first 10 years i only made approx 26000.00/yr I still packed away 3000 to 7000 per year depending on my income that yr. In the last few years the business has grown and my income more than doubled and ofcourse i save more.

Sometimes i dont know how it all happened. I guess i treat it like a plant growing. In the beginning it was a combination of fear and a challenge that motivated me. Could i really be wealthy some day?

I take full advantage of credit cards. I use them for absolutely everything and pay them completely off each month automatically out of my account. I get points to receive gift certificates for stores and i have my $ for an extra month!

I used a line of credit to buy my home(very modest home). I fixed it up carefully, staying below what it could be resold for. I bought a rental property 2 yrs ago and could nt handle the tenants. I gained 30,000. in 1.5 yrs with what rent i collected and the price i got for it. I also used a line of credit to buy rental property.

I have never bought myself nice furniture or electronics until just recently. I used to buy new vehicles but not in the last few years…slightly used is best..and then they are still a wright off.

I stay low budget even with the business…no fancy car, no frilly office or anything too “showy”. Most people living around me or even my friends would have no idea i have saved this much.

Honestly, i still worry that its not enough. I like the feeling of security and choice… and im sure that is my motivator. Thankyou to everyone for the input. I am always open to learning more.

Since I last wrote on here about 4 months ago I believe I have increased my NW by about 10% to roughly $525k at age 31. Since I live in a big city I don’t feel wealthy by any means. I believe I am around the top 5% of NW for my age group. It’s amazing that 1 out of every 100 people under 35 has over $2m saved up. I feel that I can use this $525k to start a real business and hopefully set myself up for life while in my 30’s.

While I don’t think that anyone is going to be wishing they had saved more on their death bed, I do think that many people will reach middle age and beyond wishing they had saved a lot more. You don’t want to over saved, but then again you don’t want to be old and broke either. If you have to err on either side. I’ll take the error of saving maybe a little too much. After all you can indeed have a lot of fun without spending a lot anyway.
We speaking of net worth it seems there is a lot of emphasis on savings, but the real emphasis should be on earnings.

I have a tendency to read about very rich people, and it makes me depressed about my financial situation. For example google “melnichenko’s yacht” and you’ll see what I’m talking about. That guy just took possession of a $300 million boat at age 36, which means he must have commissioned it at about age 33. And it’s all from speculation and shady deal making. Kinda makes you not want to work for it or build a real business.

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While I salivate at some of the salaries posted here, I know this is the path from me “day job” wise. I can’t imagine doing anything not creative as a desk job – but I also know I can’t have a family, and the lifestyle I want making the amount I am. So I’m studying up as much as I can on business, finance, stocks etc.

When I started working in 2004, I made $40,000 a year. I had zero debt coming out of college, which is a big deal that I owe to my mom and dad. I got out of college with about $8,000 in savings total from part-time work and some of the money they had sent me that I didn’t spend:

At this exact moment this is what I have:

Online Savings:
$33,358.26

Stocks/mutual funds (my own account):
$9,600~

401k:
$14,441

Company Stock Options:
$10,830.96

Total:
$68,000~

So I’m getting close to the average for 35 under. For my meager salary I think I’m doing ok with saving. I’m planning on putting $25,000 of my savings to use within the next two years. I’ve been studying up on stocks (which you can see i’ve dipped into already), forex and real estate – it will be one of the three.

I live in NYC, don’t have a car, pay $750 in rent (this is very cheap by NYC standards – I used to pay $600) in an area where I can still get $4 dinners, and have zero debt.

I look at income and savings as both my “offense” and “defense” respectively. My defense is good but my offense right now is pretty weak – so I’m working on improving that so that my “game” is complete.

Wow -this is so enlightening. I came to usa when I was 18 to study communications. I graduated with only $5K since I had full scholarship. My parents are strictly middle-class in India and basically dipped into their retirement savings to send me and my sister here.

I was also very lucky to start making $65K from year 2 of my job. I saved diligently but I was also helping my family and paying for my sister’s college. (about $10K/ year)
I have only been in the workforce for about 3.5 years and I have about $32k (in cash and investments) But thats pretty much it.
I still have major expenses for my sister until the end of this year and then she graduates after which I think I will be able to focus better on my financial health.

Any advice for people like me who had to start from scratch here? No savings, no parental backing, no contacts or network either.

Reading this was extremely helpful. I make about 84k now (with bonus) but there isn’t much growth in my field, financially. I am planning on going to B-school in the year 2010.

I guess we’re significantly above the median and average networth for our age. I’m married, 30 years old with 1 beautiful baby boy, and our net worth is approximately $564,000.00 Our asset breakdownn is as follows:

I’m in technical sales and my wife is a nurse. I’ve had 3 phenomonal years blowing through my quota and have made about 1M in the last 3 years. This year I should make close to $400,000. Our expenses are relatively low, the only debt we have is our house which we only owe $200,000 on and paid $445,000 for 3 years ago. This equity is not from appreciation, it’s from paying odwn principal. Every commission check I get we divide 3 ways – 1/3 to pay down prinicipal on our house, 1/3 invest in index funds, and 1/3 to our 529. We both max out our 401K / 403B every year…although the value has taken a nose dive this year. I have a goal to be debt free within 5 years (house totally paid for). Ideally I’d like to retire by 50 and feel that we’re well on our way. I feel very fotunate to be in this position, but I’ve busted my hump to get here.

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Wow Tim, that is some awesome income for age 30 (or for any age). Notice, that your current NW is only about 1.3x your yearly salary. I have a chemical engineering degree, and I had thought about technical sales, and had an offer from an industrial air conditioning company that I turned down, due to the low starting pay. I figured low $100s was achievable at a young age in technical sales, but I had no idea that $400k was in realm of possibility. Might I ask, what area of technical sales are you in?

In earlier posts in March I mentioned that I had thrown in for 6,000 shares of TTWO. That grew in value by roughly 100% or $100k, instead of selling I gave it all back and then some. Fortunately my stock market exposure was significantly limited, as I needed cash on hand for my ongoing internet retail operation. I expect that will net out about $200k this year. Subtract $100k of stock market losses off that, and I hope to gain about $100k in NW be at about $600k at 32 at the beginning of next year. I have no idea whether to put that in stocks or not.

There are a number of very basic considerations with building wealth. To be a prodigious accumulator of wealth, the planning begins when choosing what interests you from a career standpoint and what your strengths and weaknesses are. If you enjoy what you are doing and have a short and long term diversified approach, you will reach your targets. Your plan should consider the use of several different investment vehicles. And remember, live below your means. Too many people try to set a figure without enjoying the road to success along the way.

I feel like I’m a member of a big class of people who are not represented on this board at all. Maybe they’re embarassed, or maybe it’s not as big a group as I thought… but I’ll go ahead and take the step and say my piece.

I’m 30, and my net worth is about minus $45k. I messed around a lot during my early 20’s, blew a lot of money here and there on nothings, and my parents never really taught me anything about money. They didn’t have much themselves (mostly, I later found out, because they were as financially irresponsible as I grew up to be… image that… taking after your parents).

When I was 25 and I went back to college, I found that loans were the way to go. Working while in engineering school full-time overloaded me and caused me to fail classes… which only increased the time I spent in school (which increased the cost of school)… so I learned early that it was a better trade to accept the debt and get that degree, and start earning the big bucks.
Now, I’ve been working for a year and a half, and my net worth has gone from -60k to its current -45k. I feel like I’m doing good… but I’m well under the national median according to this article.

So where am I going with all this? I have a couple things to say:

First: I have a nagging doubt as to the veracity of this article, or at least as to its completeness. For starters, I feel like the “under-30″ bin is a bit too large to mean much. People under 25, just out of college, often have a negative net worth, like I do now (because I graduated college later than many people do). I know plenty of people like me… people with large negative net worths, due to large education loan debt. I feel that this group is severely underrepresented in this article, and the article as written is likely to promote feelings within that group of people tha they don’t measure up.

Second: Never doubt the power of concentrated effort toward self financial improvement. Look at me; I have improved my net worth almost 15k in the last year and a half, without any major house value appreciation, or anything spectacular like that. I don’t own a business, I don’t have any investments… I can’t afford any of those things. It’s just a year and a half of eating raman, watching tv with rabbit ears instead of paying for cable, and paying off credit cards as fast as the money comes in.

Third: If you have kids, don’t do what my parents did. My parents thought that teaching me about money meant giving me $5 a week as an allowance and sending me outside to play while they watched soap operas. No. Teaching your kids means giving them real world experience. Experience means earning the money (give them yard work to do, and give them a salary for doing it, etc), and spending it (make them buy their own clothes, help them through their first credit card application, teach them what happens when they miss payments on that credit card so that they never become irresponsible with it, and show them how a savings account and a stock brockerage account works).

Once again after crash Nifty has started going up. Now we suggest all rises should be used as an opportunity to exit old long positions.
This bull run will continue for few more days. Overall market is in bearish mood as in medium term its just a small rally due to short covering
and result season.

In the time of recession one job or one work is hardly fulfilling needs of people. So everyone is looking for supplementary source of income.
Now the question is what can be that source of income in such a bad phase of economy??

Well it’s very difficult to start new business at this point of time as it requires lot of cash and efforts. So again question is how to make more money in such conditions when needs are same and income is low?

We strongly suggest that if you like to take bit of risk and don’t want to spend too much money and time on new venture then stock market is the right place for you.
To be very frank this is not the right time for investment that is for long term to medium term investment but every day is a favourable day for day trading. No matter if NSE or BSE
is bullish or bearish as In stock market one can earn in both of these trends.

So just think about it and see if stock market can be the right place to make some extra money.

Interesting stories here. It is nice to know that so many more Americans save than the media gives us credit for. After market losses, I am slightly below the mean (average) for my age, but we’re doing o.k. There is more to life than money.

If you are reading this post and feeling concerned that you are not in the same group as some of the posters…keep in mind, their numbers are not “verified” The ebay guy that made 200k and has 0 debt and may not “make it”?? please.
No easy way to get rich but if you follow some of the good advice of some of the sincere posters on this board, you will be in good shape: Pay yourself first. 10% min into 401k regardless if the company matches. max out your roth or traditional ira 5k a year. no credit card debt. 6 months of expenses in a savings account (i use a diversified income mutual fund to get more than the crappy .5 mma return) No credit card debt, even if its zero %…just dont do it, not having a car payment helps…do you really need a new bmw every 3 years, or do you want to be a millionair? If you must, don’t spend more than 8% of your net income on your car. Your house should not excede 30% (at most) of your gross monthly income. Save 10% of your net income in cash and add to your savings per month….if you can do this, you have no worries…Wealth accumulation takes time, don’t stress because you have so far to go. Just live smart, and it will all come together!!

sheltojb, very nice. Remember, my friend, it is not the size of your wallet but the size of your heart.

In my 20’s I was consumed by play. In my 30’s I was consumed by dreams. In my 40’s I was consumed by family. In my 50’s, I am consumed by reality.

No matter.

At age 50, I have found a measure of peace in my “averageness”. If I had less money, or more money, I doubt seriously it would provide me any more happiness. Fret not. God, family, and peace of mind are worth far more than accumulated wealth.

Well, I wonder if Greg S. is still around. Back in late 2007 he told us his story of making only $200k a year and having a net worth of $330k. For the life of him, he couldn’t imagine making $200k beyond 2007, because he was selling stuff on e-bay, and killing himself doing it. He was bemoaning the fact that he could never forsee himself accumulating more than about $2 million, which he claimed was only twice the “average” for the older age brackets shown in the 2004 data at the head of this string.

Of course, he shouldn’t have been looking at the average (mean), because the really heavy hitters always skew the means in these kind of financial tables. The median (as many above as below) numbers are far more telling, indicating that as many people have a net worth of less than a quarter million at retirement than have more. So if he were right about his potential $2M, he’d be at 8 times the median at 65. Of course, we didn’t factor in inflation, but then Greg probably didn’t either.

But, lo and behold, near the end of 2008, Greg was back with another $200k income. Apparently he managed to maintain that very respectable income level despite his misgivings. He’d made a monumental rookie investing mistake: putting far too much money in a single stock, then getting greedy when it rose, missing the top, and riding back down to the cellar. Too many people learn the hard way that successful investing in individual stocks means being right twice about each security, not just once. Very few people can do that.

But hey, not to worry, because Greg is doing great: he expected his net worth to have grown to $600k by the first of 2009, increasing his net worth by some $270k in a little more than a year. Which is truly noteworthy considering an income of $200k a year, massive stock losses in a single stock, a massive downturn in stock and real estate markets overall, crummy interest rates, a tanking economy, and an e-bay business that seems unaffected across a period of sluggish retail sales.

Greg, I think you’re a bloody genius. Tell us how you did it buddy, because frankly, the numbers just plain don’t seem to add up.

It's Greg here. I've been busy and now I'm back! I just reread all of my old posts and all of the posts from others. The cool thing is that this is kind of a community financial diary open to comments. Back 1-2 years ago I was bemoaning my sub-$500k net worth and HOPING to be worth $600k plus by early 2009. Well I want to apologize in advance to anyone upset by someone complaining about having only a few hundred thousand. I know there are a lot of people out there in America who have little or no net worth. I see them everyday, in fact in my urban neighborhood, like most urban neighborhoods, I am surrounded by people with little to no NW. But this fact DOES NOT in anyway stop me from believing that I can and should have a positive multi-million net worth while I am still young enough to enjoy it. Most people who are smart or at least conscientious about money would agree with a statement that "most people in america are financial idiots." You see all the leased ESCALADE/NAVIGATOR/HUMMER,ETC gas guzzlers. You see the fivolous spending. You see all the silly means that people use to flaunt whatever spending power they may have regardless of net worth. So with all the stupidity of the average person, why on earth would you want to compare yourself to the average or median fool in America? MILLIONS of people in america are either working at Walmart or flipping burgers. Do you really think they set a good baseline. Of course they don't. Yet they are well represented in those median and mean numbers. It is a tragedy to slave away in a miserable job just so you can accumulate a couple million at age 60 or higher by miserly scrimping. Then perhaps give it all up to a nursing home that is going to bleed you dry and hopefully not abuse your old butt. This is why I told myself I want to be wealthy, and I don't to wait decade after decade, and maybe wait a whole lifetime. This is why I seek information and want to read about people – including those on this blog – who have made it. Why? Because I want to make it. I need inspiration. And I want to know how. I want to make it right freggin now! By right now, I mean over the next few years, because lets be realistic I know it doesn't happen OVERNIGHT, but it DOES happen over a couple or few years. Now you may think that I sound like a bratty toddler, saying I want $ now. But consider that I've spent 8.5 years on post high school education, and have now been in the real work force for 10 years. I worked at went to grad school simultaneously after undergrad. I'm 32. All this time I been mostly prudent with money. I invested prudently in my education got decent scholarship money, decent grads, got a good job fresh out, and now I can't afford a decent house without stretching. Now I can't afford even the slightest mishap that lands me in a net-worth zeroing hospital. Can't afford a stay at home wife like past generations. Being smart prudent and saving gets you to be comfortable provided nothing goes wrong, but it does not get you SECURITY and FREEDOM. That is what we all really want. So if i'm going to make it at all chances are its going to be in the next few years or never. I hope to live to 100, but statistically I'd probably be lucky to break 80. Continued…

…So now its 2009. Many months since my last post. I've worked really really hard, made some tough choices, and had some lucky breaks. The bulk of my NW dodged the bulk of that nasty stock market fall of late 2008. I made the $200k in earnings I was estimating. To make $200k I had to go balls to the wall. I'm talking 18hr days during the busy holiday season. And significant personal financial risk. I was buying and selling and making a market in products I know. When I work that hard and risk that much to make $200k, I get a little irritated at the office types who make that much and a whole lot more taking no personal risk and often doing nothing or sometimes worse than nothing. Then I put the bulk of my money in stocks and gained $250k. As such, my NW has risen to $950k. I've upped my expenditures. I am no longer renting for $550, now its $1200. (For $1200 I rent a place that would cost $2000+ monthly to own.) But I'm still driving a 10 year old vehicle. I live frugally, but enjoy some nice things/experiences too. I hate spending $50 or $100 or more on a fleeting night out, but I have done it 5 or more times already this year. Received $100s in parking tickets and other preventable losses/expenditures. I feel with this modest success I have adopted some lazy ways. But I want to get back on my game. I want to feel the hunger I felt when I had only $50k to my name. Why? Because I know $1m is not enough. It doesn't get you a nice house + nice lifestyle in a big city. In fact if you try to live off the interest you'll be stretching to live like an average unemployed average dolt. And because with a little bit of smarts, means, and willingness to take risks the potential for big money is seemingly limitless for anyone with those attributes. I am willing to take educated calculated risks with my money. But now I'm not itching to RISK IT ALL back like I felt with $500k. I really want $2m by age 35 (three years from now) and I am going to do pretty much whatever it takes (all legal means) to freggin get it. Anything more than $2m I will consider icing on the cake. If I don't get to the $2m I will just make do. Wish me luck, or wish me doom. Or better yet, give me some good big money making tips. I'd love to hear from entrepreneurs or speculators because I don't think the office path is going to get me there.

First of all, congrats on your success. I'm 36 this year, and have a family (wife and I) NW of 750k with house, 350k without. We're almost debt free. I know that we ARE in the RAT RACE, and without your type of HARD WORK, it's hard to get out, especially if you have 2 kids. So, seeing your progress, I think you have done tremendously well.

However, I think that we will be able to retire reasonably early (55ish), and by retirement means we have the choice to work or not. We would be completely debt free by then, and our 2 kids should have graduated or soon to graduate from whatever higher learning education they endeavor to. The key though, is that they find their direction in live, and that they can find happiness, in whatever situation they live in. So, for us, as parents, we should have no financial debts to worry about. We should have about 2M (optimistically) in network by then, and should be rather financially in good shape. Would I want more…YOU BET YOUR ASS. But the point is not just NW. Sure, that is important, but is that the most important thing in the world? Will $$ truly make you happy? At the end of the day, when you reach your 2M NW at 35yrs…will you finally not be bitter? Finally not curse those that are less fortunate then you?

You are already SO RICH and WEALTHY in comparison to 99% of the world population. Those 99% people all around the world will look at you and wonder, "why are you so stressed, why are you so bitter about your situation, about ppl around you"? Have you ever have to walk 5miles everyday (each way), just so you can get some "drinkable" drinking water, that is clean enough that won't kill you quickly (but can still kill you over time? How wonderfully blessed we are, and yet we toil for more. You complain about those flipping burgers, and for what? Because they don't have the work ethic to get out of the trenches, or at least the ideology that they are in a shit hole? What about those in 3rd world countries, that we born into their situations? There personal risks to will they live one more day?

So, how happy are you Greg? Will you only be happy when you hit 2M? 5M? What happens when you do hit it? I say all these things, not because I am some kind of wonderful, who is judging you. I say all these things because I see the same kind of bitterness, ungratefulness, and fear in you as I see in me. I also HAVE your sense of uncertainty and insecurity. But does money really cure all problems? Can it? Will it?

Greg S, you really need to learn to be grateful (I, that me need to learn to be grateful). Be grateful for your health, the fact that you are living in a expensive urban city (99% of the population do not), that you have the smarts to increase your NW so much over the last couple of years, in an economy where many (especially in NA) are struggling to find $$ to pay for their rent, next meal etc… Be grateful that someone cares enough to write this stuff down. Because, I need to be grateful for what I have too.

I for one think this comments section is absolute nonsense. Instead of blabbing about your lust for riches and gushing how your poop turns to gold, go help someone in need – homeless shelter, soup kitchen, etc.

Although the recent economic downturn has had a pretty significant impact on my net worth (as for most of us I would imagine) my net worth is still about $2.5M if if I include my home equity and the current value of several rental properties. I’m currently 55 (my wife is 60) and I’ve recently left my career position in medical devices due to a reorganization. I’m considering moving into a retirement mode and utilizing my investment income (mostly stocks/mutual funds and my rental properties as my source of income. We have pretty frugal lifestyle – do like to travel but not into new cars, fancy clothes and dinners and that kind of crap except once in a while. Anyone in a similar situation that can share their perspective?

I’m 31, NW of ~225K which I think is ok. I work for the city, I save the max deduction every year and live frugally in Manhattan (with a 10 year old car). Besides that I have a life, great friends, a 6 year old son (with a sweet college fund) and I am able to work out every day and get away every summer.

People, it’s just money, save some, but live your life. You’ll soon look in the mirror and wonder how you got so old, and the only thing you’ll have is money if you forget to live.

My wife and I have more or less the same net worth, both retired very early (55), I’ve been retired for about 9 years and we’re having a ball.

We put both kids through private university (and one through flight school afterward) years ago, they’re both doing very well, no worries on that front.

We travel extensively (one kid’s an airline captain which really helps on that front), enjoy our extended family and friends no end, and have to pinch ourselves sometimes–we’re so grateful for our situation.

We did plan well, investing regularly and heavily (and boringly) for all our working lives. We are fortunate that we both have DB pensions, along with Social Security to form the basis for cash flow. We take only small draws from other retirement accounts and don’t touch our other investments. We’ve lived in the same house since 1972, although we have put on two large additions.

With your net worth, you ought to be able to set yourself up with cash flow to meet your needs if you want to retire early. The only thing I see about your situation is that you might be too heavy in real estate, and may need to move some of that into something more liquid and more diversified.

If you haven’t already, I’d find a superb financial planner, and set up a specific plan to get you where you want to go. You seem to have the financial firepower to let you do this.

We all get bombarded every day with mails, morning briefs as to which stock we should pick and how will be the market trend today. Every time the brokerage houses will send the stock market tips> as if we all are playing a gamble and need the tricks as to how we can win it. And anticipating as to how to do stop loss and at least will make smaller profits. What most of the investor do is they consider short term trading as the long term investment and believe as to how it can be doubled in a day. Buying a stock just because the price is low and some stock market tip you received that this will boom in the market today. What most of us do is that we all trade with money which we can’t afford to lose but the market always says that invest only that money which is in excess to you. All of these are the big mistakes which we commit every day in spite of being reminded every time that we should complete our home work for the next day.
Things to Remember when invest in stock market: expert>
 We believe that the fundamental says invest in those company about which you know completely , but that doesn’t mean you fall in love with a company and a particular stock just because you are familiar with it or it create news in the stock market every time. Most of us just try proving our fundamentals are right and for that we apply too many technical indicators on that stock. It’s not true that the stock will go according to its fundamentals and technical, many stocks behave opposite to their indicators, thus they do not guarantee as to whether it will go up or down.
 Investors jump to penny stocks as they immediately boom in the market due to rumors what need to understand is that the Penny stocks are very risky , and on this basis make your strategy as to which one to pick from that lot and how much to invest . The portfolio of the investor should be constructed in such a manner that it allots weight age to different sector and the sizes of the stocks so that the diversification is there and the risk can be mitigated. Therefore the weight age of penny stocks in one‘s portfolio should not be more that the 15%. This is to minimize the losses and to accumulate the profits also.
 Keep a watch on the industry of the particular stock. Most of the stock behaves according to their industry trend. Thus if in the budget the government committed to play large role in the infrastructure sector , all the stocks will go react as per the budget and the whole sector recorded the jump of 12% on the next day. But it might be the case that the industry is booming and the stock is going down, therefore along with Industry, Company information is also vital.
 Past performance of any company doesn’t not hold true or affect its future performance. Many of the Indian stocks which were heavy weight in the past few years and were considered the blue chip companies in this market are either bankrupt or have become extinct in the market. Thus continuous performance analysis and evaluation is important.

I’ve read lots of the comments from some of the younger posters, with very optimistic assumptions about what they expect their investments or businesses to earn. I’ve also noticed that a number of these young posters are married. Ultimately, your net worth will most matter when you are near 60 or 70. Until then, you are only speculating about your life and acquired assets in the future. For example, a number of these posters may divorce,and if there are children, be drained not only from the division of property, but also child support. 90% of new businesses fail. So, my point is, absolutely control what you can now, but don’t assume too much when you are older based on what you have now.

Wait…I am confused. In retirement, savings, and checking we have about $25,000, but we also owe almost $227,000 on a mortgage. We own our cars and everything else outright – no debt but the mortgage. So according to my calculations, we have a net worth of about -$202,000. Do I just not understand what net worth is? I thought it was the combination of your assets and liabilities. Do most 30 year olds really have their mortgage paid, or do they just not have one yet?

You have left one very important element off the asset side of your calculation: the value of your house today.

If your house is worth $400,000, that means you have $173,000 equity in the house ($400,000 value minus the $227,000 loan), which is a real asset. That would bring your total assets to $198,000, leaving you with a $29,000 negative net worth.

You see, you always have to offset the loan against the value of the asset for which you took out the loan.

Now, if you’re one of the unfortunate people whose home value is now less than the mortgage amount (the common term is “underwater”), then you do indeed have a substantial negative net worth.

No, most 30-year-olds do not have their mortgage paid, and for many of them today who are doing well it’s the last thing they want to do. For many young folks with strong incomes and earning power, taxes are a big issue. The mortgage interest deduction is very valuable to them. When you consider that new loans today are in the 5-6% range, and add to it the fact that Uncle Sam will pick up about 1/3 of the interest, the loan only costs 4% or less. That’s very cheap money, which in the coming years will seem like solid gold as interest rates increase.

I don’t know when you got your mortgage, but I’d venture to say you’d have a hard time today getting a loan that large with your relatively meager savings, unless your income(s) are very, very high relative to what you’re saving–or unless you made a very high down payment that reduced your savings to that low level.

What I told you in the last post is conceptually correct, but I obviously did the math wrong. If your house is worth $400,000 as in my example, you have $173,000 equity in the house, plus the $25,000 for a net worth of $198,000 (plus the value of whatever else you own. Sorry for the mistake. Your net worth statement should look like this:

We bought our house in July – it’s our first house, and supposedly it is worth $270,000 according to an assessment in July. We put down 35K. We’ve only been married five years and have two kids. I dunno – I feel like we save as much as we can and it hasn’t exactly been the best five years for investing – we were quite thankful all our savings were in CD’s when the market hit the fan. Anyway, our down payment was less than 20% so I don’t think that it was a lot of money. Though it did definately drain our “meager” savings.

Actually, to be honest I was somewhat surprised how easy it was to get the mortgage given the fact we had been sailing around the world with no income for 4 months, unemployed for 2 months, and my husband hadn’t even started his job yet when we gave them our “estimated” salary. (We estimated accurately, being that we didn’t want more house than we could afford – just thought it was interesting that after a major mortgage crisis it was that easy to secure a loan based on a job that hadn’t been started yet and a salary that couldn’t really be verified…anywhoo.)

According to your equation my net worth would be $74,000 I think – why does net worth matter and what would it be an indicator of?

Yes, well I’m sure $74,000 is about right. It would be $68,000 plus the value of your cars and household goods.

What does it mean now? At this point in your life, not a whole lot, except it is considered when you apply for a loan. Your loan was probably approved because you were prepared to put down about 14%. Even though it was less than 20%, a downpayment of 14% or so is considered substantial these days. But still, you’re right–lending standards have tightened significantly and you did well to get the loan under those circumstances.

So the fact is that you seem to be doing fine. You’ve got a house that you seem to be able to handle financially. Now focus on spending less than you earn, avoid accumulating consumer debt (that is, credit card debt), and continue to put every cent you can into retirement savings and other savings.

Beyond that, you MUST structure your investing into a diversified portfolio that can grow in the good times and cut your losses in the bad times. And you MUST invest regularly, rain or shine. If you insist on staying in cash and bonds, you will get killed when interest rates go up again–which they will. You’ve already missed a huge runup in the equities markets since their bottom in March (well before you bought the house). Please find a good investment advisor (not a stockbroker) and learn the basics of good investing.

Oh, and don’t forget to start 529 college funds for the kids, if you haven’t already.

First, very few people ever bother to understand or figure out their net worth. Therefore, they have no idea when–because of consumer debt or other things–they owe more than they own. A very dangerous situation, which leads to a Pollyannna perspective and often gets them in real trouble. So the first answer is that knowing your net worth is a reality check. You’ve done that and you now know that you’re in positive territory and positioned to do very well if you continue to make good financial decisions.

Second, it’s a point of reference. Try plotting your net worth on a graph every January 1. I do that and have for decades. It’s very instructive. Over time, you want to see that line trend upward. Of course, there will be down years due to bad market years, unusual expenses, etc., but the line must trend up over your whole life. I’ve been retired for ten years and the line still trends up because after a lifetime of investing you achieve what the money people call “critical mass,” where even devastating losses like we had over the past two years don’t affect your lifestyle–and you tend to rebound more quickly. At the very least, you’ll want that trend to beat inflation, which is a cruel tax that very few people even realize they’re paying. Your net worth increases above inflation are real achievements.

Yeah – the inflation thing is interesting to me. For example, at my husbands job and my job there are no raises expected for two years. There are even talks of decreasing retirement matching and raising the employee health insurance contribution at my husbands work. I was discussing with my dad how inflation HAD to occur over the next few years with the printing of money like there is no tomorrow. My husband and I were somewhat relieved that we bought the house when we did – at least the cost of that will remain in line with our finances. However, for everything else I am really concerned that our salaries won’t keep pace with inflation – certainly cost of food and gas have increased a lot in just the past few years – and yet I can’t imagine that short-term with such low yields on everything – that we can really expect investing to “protect” us from that inflation. What do you think?

Your analysis is basically excellent, in my opinion. While inflation is technically near zero now (unless you’re sending a kid to school or need medical care), it will definitely become a factor over the next year or two as the recovery takes hold. How big an issue it becomes will depend largely on how good a job the Fed does managing things. But inflation will return to one degree or another.

The good news for you is that you’re in great shape with the house. You bought it near the bottom of the market, you can handle the payments, and you’ve already got some equity built up in it. What’s more, I assume you’ve got a good interest rate. If you hold on to that house and that loan, in five or ten years the payments will seem almost comically low. Plus, between appreciation and added equity from your principal payments, your net worth will have increased noticeably.

Can investing “protect” you from inflation? Sure it can, and historically, it always has. In fact, it’s the only thing I know of that can protect you. CD’s have their place in many people’s financial picture, but to rely on them excusively is a problem. Here’s why: Inflation today is near zero. And guess what–so are consumer interest rates. So it’s essentially a wash. When interest rates go up, so will inflation. So you essentially wind up chasing your tail. Sure, you might be making decent interest rates at some point, but when you factor in inflation, not so much. Your buying power is still about the same.

The way to win is with a carefully balanced portfolio consisting of many asset classes, domestic and international stocks, bonds, real estate, and a bunch of others. These portfolios are structured so that when times are bad for one asset class, they’re good for others, so in most years you’re a net winner. Plus, you regularly rebalance the portfolio to keep everything in kilter. The choice of what to put in it depends on a lot of things: your age, your goals, your personal risk tolerance, your health, etc. etc.

Beyond doing this, the other key–as I implied before–is to simply add to your investments week after week, year after year, no matter what. It’s the most boring way to invest, and it’s the one that makes the most sense. 401k plans at work are the best places to start. Load them up even if they’re cutting back on the matching funds. The tax breaks are still a real advantage. If and when you change jobs, NEVER cash out the 401’s. Roll them over into IRA’s or into the new company’s plan. Beyond that, at your age, Roth IRA’s are probably your second vehicle. After that, simply investing on the open market will be advantageous. And again, don’t forget those 529 plans for the kids.

But all these vehicles (401, IRA, etc.) are just buckets, they’re not specific investments. You can put anything you want in them. That’s where you should use a good investment advisor to formulate and execute a cohesive plan across all these investments for both of you. Even though they’re invididual buckets, the best way to look at them is as a single cohesive portfolio, and a pro is the best way to achieve that.

Truth in advertising: I have absolutely nothing to do with the investment business except as a client. I am retired from the film and TV field. My views are simply the product of my own experience. My wife and I have had excellent advisors for 40 years plus, and it has worked out very well for us. We’ve employed basically the approach outlined here.

Correction in Indian equity market was expected for last few weeks (23/1/2010).In the meantime good investments are coming in power sector.It is now high growth sector in India.As expected prior budget a good amount of correction is going on for last two days.Another high growth sector is biotechnology, as India is becoming more and more involved in vaccine making, more and more global manufacturer are planned to establish their manufacturing base in India.
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I was curious about how I measured up financially for my age as I am approaching 30, so this has provided quite a lot of insight.

I’m 29 and have a net worth of approximately $150,000. I sole trade as a Business Analyst and earn around $400,000 p.a after tax. I am married with three children.

We rent our primary residence, but own a holiday home which we have approximately $80,000 equity in. We have 3 nice cars. Our current account today has $11,792.72 in it. We have never had a savings plan and are very careless with money, often spending up to $30,000 a month with nothing to show for it! We pay for a full-time nanny ($50,000 p.a) and cleaners/gardeners for both our primary residence and our holiday home. We can easily spend $600.00 on dinner/wine for the two of us at a top restaurant. Last year alone we had 8 holidays at an average of $4,000 each. We pay for our children to have private schooling and additional private tuition including horse riding.

This year (starting yesterday!) has become a “get real” year, and a time to look hard at our spending. Using some of the net worth calculations on the internet we should have a net worth in excess of $2,000,000, so we are WELL short!

We are not going to consider changing what we spend on our children’s education, however, the wife is not allowed to buy designer handbags on a weekly basis! It is scary how much we could have saved if we were that way inclined, but our one saving grace is that we have no finance on any household assets we own, and have no credit cards or loans (outside of our small mortgage) whatsoever.

Oh, and the real kicker is that I have worked as a financial and investment advisor, a trader and stockbroker! I have a Masters degree in Economics, and professional qualifications in financial services, securities and investments… I should know what I’m doing!

I just turned 30 and I have a net worth of approx. ~$240k CDN. I think I am unusual because I don’t own a home, I have no debt and I haven’t made any money through investing, just through my job as a lowly engineer. I only have one investment in my RSP and it’s worth 40k. The rest of my net worth is cash.

I can’t make investment decisions. It’s simply too stressful for me, even though I read a lot and have a fair understanding of things. I can’t even move out of my parent’s house (as we share expenses) because the prospect of tying money in a non-liquid asset is not comfortable to me.

What should I do?

I have no goals either, just anxiety because I have a very pessimisstic view of the future.

So -How many of you 30 and under bigshots gained your net worth by yourself.Or was it Daddy or Grandpa’s Business. Just curious Im 51 years old never had a dime handed to me and my net worth is 700k and proud I did it all by myself.I live in a small town and 95% of all businesses were started by Daddy.

Jeff–Sorry to see that you’re so bitter. I’m 14 years older than you, have two kids with substantial net worth, and they’ve both done it themselves. They’re proud of what they’ve done (and what they are), just as my wife and I are proud of our accomplishments. I’m speaking up for young people because your kind of stereotyping does nobody any good. Of course there are still “trust fund babies”–always have been. But you paint with too broad a brush, and you seem, well, just a little jealous of those who succeed at an early age.

loggedout–

You need to log out of your parents’ home, and get a grip. Maybe seek some counseling about your fears. Seriously.

Steve–

You’re cruisin’ for a bruisin’ and you should obviously know better. Let your next big purchase be Thomas Stanley’s new book “Stop Acting Rich.” After you buy it, read it twice and close your wallet. You’re an absolutely classic case of why high earnings often don’t translate into high wealth.

My NW has grown to roughly $1.2m and now I’m about to turn 33. I’ve posted on this board a few times over the past couple years. Strangely even though I’m appox 4x higher worth it was a few years ago when I first posted, I now feel a desire for money more than ever. Or maybe I just don’t remember how bad I wanted it before. But now that I’ve made a little and see that is is really is possible to potentially create wealth while young enough to enjoy it, it has wetted my appetite for more – a lot more. But at the same time gives me a means to be totally lazy and complacent, it seems easy to get lathargic with no external drivers (boss, kids, wife, etc). I get so irritated when I see all these stocks that have gone up 10x in the past few months and realize than my $1.2 could have easily become $12 million, and I could stop worrying about money. And not to mention wall street, all the people getting filthy rich, and not doing any real work or taking real risks (as in with your own money). Sure as heck makes it harder to bust your ass, when you see people getting seriously rich for free.

Interesting site and posts… I’m single, 48, net worth of approximately $180,000, I make approximately $85,000 annually and really enjoy my job (plan to stay until I retire). I know I’m very lucky to have a good, stable job.

I spent most of my 20s and 30s in graduate school and traveling. I don’t regret any of it, but realize I started working full-time late as compared to the average (I was 37), and waited to buy my first home until I was 39.

I save a large chunk of my income via 401K, Roth IRA, and I’m very, very fortunate to have a fully funded defined-benefit pension. I hope to have a net worth of somewhere around $1M or so by the time I retire. But as someone in an earlier post stated so well, each one of us will have to make due with whatever we’ve been able to accumulate once we stop working (at least full-time).

My advice: It’s all about balance. I had a wonderful prof in graduate school who worked an extra five years (till he was 70 or 71) for a more comfortable retirement, only to die of prostrate cancer less than a year after retiring. We can’t predict the future, so be sure to enjoy the journey (as well as your family/friends), spend some of your hard-earned $$ along the way, and don’t put all of your eggs in one basket. Pura Vida!

Im 27 and my net worth is ~-39k. Student loans and 1 credit card bill is what’s making my net worth negative. This year my CC will be paid off and my student loan will be paid off significantly as well. It should bring my net worth to about -19k. Fortunately for me my earning potential is pretty high and I should be making 100-150k in the next year or so, plus I’m starting my company this year (which has virtually 0 overhead), and I live pretty meagerly and won’t let my expenses ever go over 2,000 a month no matter how much money I make. By 30 I’m hoping my net worth will be 1 mil, assuming my company does well. If not I’m guessing I should be around 2-300k.

Mang, going from negative to plus $1m in 3 years is quite a goal. But I think you have keyed in on the primary way to accomplish that – going into business for yourself. I have had kind of a NW event over the past few years. In 2005 I was age 27 involuntarily unemployed and although highly educated I had no legitimate job prospects. I had $100k saved up from just saving my wages and renting a cheap apartment. So kind of by force I went into business for myself, starting at the very bottom, bootstrapping, doing all the work myself. When the front end of my Hyundai got clipped pulling out of a fast food drive through, my retired dad graciously passed me down a 17 year old crysler minivan…gasp…worth about $800 and said I could just pay him half of the value, when I sold it. I wasn’t embarrassed to drive it at all. Five years later I’m 32 and my net worth has gone from $100k to worth $1.2m. Back when I had 100k a million sounded like a lot, and it has changed my perspective a little, but I’m not sure how it is going to affect my life if at all long term. My prospects are completely uncertain, as my business doesn’t have much if any staying power or sustainability. I’m living in a nicer place and driving a nicer car, but that is normal as one graduates from 27 to 32. Now that I have that $1m it doesn’t feel like much at all. I don’t feel at all as though I made it, but it is nice that my bank balance doesn’t constantly tell me that I’m a total looser in black and white. I feel that now that I’ve made a million, I realize how little money that actually is. This is when you consider that educated people will regularly make $250k and up while just goofing off in the typical corporate career track. People who are highly educated, I’m talking JD, MD, MBA from a top school, will regularly be pulling $1m+ annually if not now then in the coming years. Big shot deal makers and top attorneys might be able to make that much THIS WEEK. So that really puts a $1m NET WORTH in perspective when you compare to a $1m ANNUAL INCOME. Anyway, good luck on your business. If you’re up for talking about it, I’m certainly interested in any business that can go from zero to $1m accumulated that fast, hit me up at greg8125@gmail.

[…] I was curious because I read a few years ago about the average American net worth on CNN.com but we all know how the news like to twist things around. So I googled “average american net worth by age” and discovered a post by All Financial Matters. […]

Just the stats:
Age 43 Married with two kids
Work for utility wife is school teacher
Net worth $946,000
Investment accounts $550,000
Current Cash Value of Pensions 146,000
Home Equity $250,000
Strategy: Consistently put 15-20% of income into stock market from age 23. Never any debt besides home mortgage.

very interesting reading these posts. seems as if many of the posters have high incomes. my situation is somewhat different in that my salary is just now at 50K and I am 44 with a graduate degree. I work as a scientist in ecology in an academic setting. My wife stayed home with our only child for five years and now works in education making 70K (she also has a graduate degree). When our child was born we lived on 35K/year and still saved – albeit not much. Currently we live in a home we bought for 100K, paid off (now worth 175K) and have ~400K in investments exclusive of the house. The majority, ~275K is in IRA’s and other tax deferred accounts. We have no debt, but are not extremely rigid in our budget. We give to causes we believe in and attempt to live sustainably. Not sure how much we’ll end up with, and don’t really care, but as has been mentioned on here ad nauseum living below your means is a sure way to get yourself in position to be able to retire. I’ve only bought three cars since I started driving at 16. My Sentra lasted me 16 years and I am hoping my Prius surpasses that!

I enjoyed reading all of these posts. As the chart is dated for 2004, I’m sure the fiqures have changed. I think achieving a certain net worth level is all relative to who you are & what your expectations are. I think a lot of us feel if we could have “just a little more” then everything would be good. I know people that feel they could not retire with anything less then 5 Million and others that have a goal of $300K so it all depends on lifestyle. I did want to comment on GregS about how he felt that some got money for free, I don’t think anything is free, they will earn it in one way or another. Enjoy life, save what you can because it would be a shame to not live life and then not be the one enjoying the fruits of your labor.

Wow, all the net worth here are amazing. With the news stating that Americans are not saving enough and so many people are in debt, I’m so glad there are still lots of people with such a high net worth.

In 2002 (27 years old, the year I graduated from optometry school), my net worth was -$130,000 (that’s the cost of my education). Since my parents didn’t have money, I had to finance my education with student loans. My income for 2002 was less than 20K. From 2003-2008, it was between 65-90K. I had to move to AZ to start making 100K.

Now that I’m 35, I still owe $80,000 in student loans and have about $300,000 in savings (this includes 401k, Roth Ira, etc). I have no other assets (no homes, etc) other than my 2004 Honda Accord, which is fully paid for. The reason I’m not paying off my student loan is because the interest is only 2.635%. I figure I’ll make more if I invest my money in mutual funds or stocks.

I still live like a college student right now. I bring lunch to work almost every day, eat out 1-2x/wk, don’t shop a lot (but I do love shopping). I’m single, no kids, not married.

My wife and I are both 33, and work in IT. We have about $1,300,000 in assets and about $900,000 in liabilities. In 2007, the year before we got married, our net worth was just about $1million. In 2008, when the market crashed, our net worth was about -$50,000.00. We’ve got three rental properties but we’re underwater on two of them, and above water on our main house and the third rental property.

The fact is, even if we’re worth $400,000, with the kind of leverage we are employing, there really is no way to predict what it will be in even 12-24 months.

I can say this, I’ve never _felt_ like a millionaire, like you might see in a fancy house on CSI:Miami, and if either of us lost our jobs, we’d probably be in deep doodoo if we didn’t go back to work.

My hope is that when our daughter turns 18, she’ll have $1million in fixed-income securities so she can pursue whatever career she wants and not worry about having to be a wage slave like us. >:)

I ready many of these posts with fascination and bemusement. I fail to understand why so many people place so much of their self-worth on their net worth. There are more important things in life than your bottom line. As for me, I live well within my means, have enough in savings for a few rainy days and own my home. More importantly but perhaps less tangible, I have my health, spirituality and a love of life.

Average includes people who earn billions which skews the average number way up. If you excluded people earning over 10 million per year the average and median would be much closer.

Of course the bottom half includes people who earn Zero, so if you excluded those then you would shift the average again.

Bottom line is that both ends of the bell curve skew the results – most people are interested in where they are compared to other folks – excluding those in skid row and prison and excluding the billionaires

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